HW Week 1 - ACC305Week1 Exercise314 1. Acid-test ratio =...

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ACC305 – Week 1 Exercise 3-14 1. Acid-test ratio = Quick assets ÷ Current liabilities = 1 .20 Quick assets = Current assets - Inventories Quick assets = Current assets - $840,000 Current assets ÷ Current liabilities = 2.25 Current assets - $840,000 ÷ Current liabilities = 1 .20 $840,000 ÷ Current liabilities = 1.05 Current liabilities = $800,000 Current assets ÷ $800,000 = 2.25 Current assets = $1,800,000 2. Debt to equity ratio = Total liabilities ÷ Shareholders’ equity = 1.8 Total liabilities + Shareholders' equity = Total assets Total liabilities + Shareholders' equity = $2,800,000 Let x equal shareholders' equity 1.8 x + x = $2,800,000 x = $1,000,000 = Shareholders' equity 3. Noncurrent assets = Total assets - Current assets Noncurrent assets = $2,800,000 – 1,800,000 = $1,000,000 4. Long-term liabilities = Total assets - Current liabilities - Shareholders' equity Long-term liabilities = $2,800,000 - 800,000 - 1,000,000 = $1,000,000
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Exercise 3-15 Current Acid-test Debt to
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HW Week 1 - ACC305Week1 Exercise314 1. Acid-test ratio =...

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